What's Next for ACOs?

Even though accountable care organizations are a somewhat new care delivery model, they have made quite an impact on the world of healthcare already. New commercial ACOs are announced on a regular basis, and many organizations applied to be part of CMS' 2013 class of ACOs. In fact, there were more than 324 self-identified ACOs across the country as of December 2012, according to a Leavitt Partners report.

The care models have already started reducing healthcare costs for some organizations. "Depending on the relationship, we have generated savings within the first year of operations," says Charles Kennedy, MD, MBA, CEO of Aetna Accountable Care Solutions. "It doesn't take long to see the fruits of this way of operating."

Forming ACOs and working toward coordinated, accountable care does more than just generate savings, however. "It opens up windows of innovation, because [before] we wouldn't get reimbursed for doing that kind of work," says Chuck Lehn, CEO of Banner Health Network in Phoenix, Ariz. Banner has developed commercial ACOs and is also part of the Medicare Pioneer ACO program. "In accountable care models, we can be creative, and we're seeing successes in creativity," Mr. Lehn says.

ACOs across the country are harnessing that creative spirit as they continually strive to achieve the triple aim of higher quality care and better patient outcomes at a lower cost. Here's a look at what is developing in the world of accountable care.

Reimbursement model experimentation

Different payment models are expected to evolve throughout 2013 as ACOs get their footing and do more experimentation with various models. "In different markets, we see different speeds that the market is moving from fee-for-service to pay-for-value," explains Jerry Penso, MD, MBA, the chief medical and quality officer of the American Medical Group Association. For example, California has a robust pay-for-performance model established, while other states and other markets are not quite as far along and are moving slower in that direction.

Banner's accountable care payment models run the gamut from fee-for-service with an aspect of risk to capitated payments to bundled payments. "It depends on the payor and the system's capabilities," Mr. Lehn explains, so its payment models may evolve as capabilities on both sides increase.

Even though Banner and its partners have not settled on one way to pay, Mr. Lehn is sure of one thing. "I don't see us going back to just doing fee-for-service episodic [payment]," he says.

As a payor, Aetna is currently relying on a modified fee-for-service payment model, according to Dr. Kennedy. In its ACO payment model, Aetna establishes targets based on quality and efficiency targets and shares the savings achieved with the provider. As providers gain more experience managing populations and overall cost of care, Aetna’s models shift to put more of the payments at risk.

While Aetna is currently focused on modified fee for service, Dr. Kennedy says it has not settled on that model as a permanent solution. "We are keeping our eye on bundled payment methodologies as they are rolled out and proven," Dr. Kennedy says. "They could become a component [of our program]."

Commercial ACO payment models are still evolving in different markets, but it seems as though organizations across the country will continue to move away from straight fee-for-service in favor of reimbursement models that link payment to care quality. "They are trying…to figure out a compensation model that aligns physicians with ACO objectives," Dr. Penso says.

Continually improving care quality

ACOs are continually working to improve the quality of care they provide as part of meeting the quality and patient outcomes aspects of the triple aim. Quality measures have been set with payors that guide the organizations, and providers are now getting innovative in how to further improve quality through care coordination and population health management.

"The area we're hearing strongest about from ACOs [is] the move to care coordination," says Dr. Penso on the future direction of ACOs. "That's where [organizations] want to apply more of their human and information technology resources."

TechnologyBanner has invested in technology that allows it to take patient data it received from its partners and follow at-risk patients in each organization's population after institutionalized care to prevent falls or readmissions, according to Mr. Lehn. "The [technology] is allowing us to follow the at-risk populations," he says. "That's exciting."

Moving forward, ACOs can take the use of technology further, past using it to just identify and track at-risk patient populations. Dr. Penso says technology and data can be used to measure the effectiveness of care interventions with high-risk patients. "[ACOs can] use information technology not just to identify the patients, but to evaluate the effectiveness of interventions in the program," he says. Using technology in this way can aid ACO leaders' reflection on their organization's care interventions and help with care quality and patient outcomes down the road.

Care managementOrganizations have already started reflecting on their programs and finding new ways to implement care management programs in order to provide efficient care at a lower cost.

Banner is starting to implement cost-effective care interventions to help its high-risk population. "We can't afford to have a nurse case manager or a physician manage everything," Mr. Lehn says. "We're trying to find solutions that get [patients] to the most appropriate level of [care]."

To do so, Banner is going beyond the traditional use of care managers and physicians for care intervention and management. The system has been developing relationships with non-profit community organizations to help provide quality care to high-risk patients. "Some [patients] need more literacy and resources to support them," Mr. Lehn says. "We need community organization involvement…Our relationships with those [community organizations] will evolve."

Establishing and/or expanding relationships with community organizations in the future can help lower costs by not using physician or case manager manpower, and can result in better patient outcomes for ACOs.

Keyword: Collaboration

As the ACO model spreads through different markets, and commercial and CMS accountable care programs grow, more ideas will surface on how to run an ACO and meet the triple aim efficiently and creatively. Down the road, many of those advances will come from the collaboration of the entire healthcare market.

"[Payors] have to engage with the delivery systems," says Dr. Kennedy. "Through a collaboration and partnership with delivery systems, we bring…areas of expertise that have direct applicability to ACOs."

"Collaboration leads to better outcomes," Mr. Lehn agrees. "I'm encouraged by the collaboration between provider groups, payors and community groups. We're going to see a lot more collaboration."

Some organizations have assisted in ACO-ACO collaboration. For instance, AMGA's accountable care collaborative for CMS and commercial ACOs allows for shared learning, where member organizations share best practices for performance improvement. Also, the CMS Innovation Center has hosted summits for organizations participating in its ACO programs so leaders can meet face-to-face and discusses successes and failures.

Overall, collaboration between and among ACOs, provider entities and payors will lead to more innovation in accountable care and creative best practices for developing ACOs.